Pfizer’s decision to ramp up the price of its epilepsy drug phenytoin sodium has earned it a record-breaking fine from the UK authorities.
The Competition and Markets Authority (CMA) has levied an £84.2m fine on Pfizer – as well as a £5.2m penalty for distributor Flynn Pharma – saying they hiked the price of the drug up to 2,600% overnight in September 2012. Pfizer said it “refutes the findings” and will appeal.
The allegations centre on Pfizer’s sale of its branded product sold as Epanutin to Flynn at that time, which promptly genericised the drug, freeing it from price regulation.
Pfizer continued to sell the product to Flynn at a sizeable mark-up than its previous prices, and Flynn sold it on to pharmacies and wholesalers “charging them prices which have been between 2,300% and 2,600% higher than those they had previously paid for the drug”.
As a result the amount the NHS was charged for 100mg packs of the drug rocketed from £2.83 to £67.50, before reducing to £54.00 from May 2014, pushing up NHS spending on the drug from around £2m a year to £50m. The prices of the drug in the UK have also been “many times higher than Pfizer’s prices for the same drug in any other European country,” says the CMA in its judgment.
The case suggests that massive price hikes for off-patent drugs – particularly those with few alternatives – may not only be a phenomenon in the US, where Turing Pharma’s 5,000% increase for toxoplasmosis drug Daraprim (pyrimethamine) prompted a public outcry and scrutiny of pharma practices last year.
The CMA says that the NHS had no alternative but to pay the increased price for phenytoin sodium because epilepsy patients taking the drug should not be switched to other treatments, “including another manufacturer’s version of the product, due to the risk of loss of seizure control which can have serious health consequences”.
Pfizer maintains that its divestment of Epanutin “fully complies with established competition law” and that the deal allowed it to “secure ongoing supply of an important medicine for patients with epilepsy”.
“When Flynn launched its product, the company set a price that was between 25 and 40% less than the price of the equivalent medicine from another supplier to the NHS which had long been regulated, and appeared to be acceptable to, the Department of Health,” it asserts.
The company said the ruling highlights “policy and legal issues” concerning the respective roles of both the Department of Health and the CMA in regulating the price of pharmaceutical products in the UK.